Well... I actually think it's a stretch to say "Obama wins the Nobel Peace Prize", which implies he actually did something to earn it or had to compete with others to get it.
The committee gave it to him for whatever reason they wanted to. Probably should have been "Obama awarded Nobel Peace Prize", which is a more accurate description of what happened.
Next maybe he can toss the football around with Emanuel on the White House lawn, and they can award him the Heisman.
No, people do not need buggy whips, and you're wasting resources by keeping that business going. And wheat won't last forever. If there's too much to be eaten you're just wasting resources by inflating the price artificially.
Sorry, but your pie-in-the-sky "we can fix the economy by fiddling with the money supply" is exactly the problem we are facing right now. Instead of the short-term, limited recession that you fear so much, we have an all-out crisis almost as bad as the Great Depression (which was also created and prolonged by exactly the kind of fiddling you espouse).
Please get out of the way, and stop doing this to us.
I'm in favor of a representative lottery, myself. It would work just like jury duty - all registered voters go onto the list. When your number's up, you have to serve. To get out of it, you have to appeal to a judge with a really good reason why you can't do it.
These are interesting ideas, and I certainly go along with the idea that the greatest power should belong to the smallest groups (governing from the bottom up). I've said before that communism is theoretically the best possible system of government, but it is practically unworkable for groups of more than about 40 or 50.
Anyway, just some thoughts. There are good people in government, who really care about the public. Sociopaths may be over represented in the halls of power and the corporate boardroom, but they do not even make up the majority.
Yes, there are good ones, but way too few and far between. For the most part, politicians do not have souls. (sorry if that offends you). If they have a culture of sociopathy, it doesn't really matter if many are not built that way. Not having souls makes them easy to manipulate, it's just that we're letting the wrong people manipulate them.
No, it doesn't. It just shows how the Fed manipulates the economy. Just because banks know that they can go to the Fed or the Treasury to get more debt or a bailout when they are in trouble doesn't mean that it's caused by rational decision-making, it just means that the banks understand the kind of system they are working under, which allowed private profits to be made, and that risk is mitigated by allowing huge debts to be socialized by the tax system.
I don't think they knew, at least at the beginning of the crisis. It wasn't obvious at all.
So, you've never heard of the "Greenspan put"? The bankers and Wall Street certainly have.
Or - unless you're traveling and using hotel or hotpoint access to get to your server a lot, or your list is too long, just block SSH from all IPs except for the addresses you know you'll be using.
Firstly, why should they be falling? What does having the price of everything fall or rise achieve that an increase in the money supply with constant prices does not?
Well, your premise was that you could increase the money supply without inflation when "everyone decides to hang on to their money more tightly". The response that should be to drop prices, so people will buy more. Not sure what else you were referring to - if people are holding on to money, they are not buying goods, yes? So maybe because prices are too high?
Secondly, price falls are a very difficult process to a point where this process doesn't really work. This is really the nub of it, if prices were not sticky the gold standard would work. Workers and unions defend wages, firms may need their input prices to fall before they can fully reduce their output prices, competitors wait for someone else to move first, homeowners hold out for house prices which are months or years out of date, etc. Prices stay high for months or years and resources get underused, including labour. If everyone could agree to reduce their prices together there'd be no problem, but it's a coordination nightmare compounded by money illusion. Why bother when the state can adjust the money supply? It's like changing the clocks to do daylight saving....we/could/ have the same effect by all agreeing to adjust all of our schedules, opening times, etc. all at once on the same day whilst keeping the time the same. But it's much easier to change the defined time of day.
You're making a preconceived assumption that everything has to be centrally planned. BTW: when industries do this it's considered price-fixing and is illegal. Somehow government or the Fed should do it instead? Why not just let the prices correct themselves. If people aren't buying buggy whips, maybe the buggy whip factory should just shut down. If people aren't buying much wheat, farms should cut back on production. If a labour union won't allow a business to lower wages or layoff workers even when people are buying less of their product, the company should go out of business. Yes, that means some will go through hard times. But that's better than putting everybody through hard times to keep a business going that is doomed to failure anyway.
Which is just saying that the other side of increasing the supply when the velocity of money falls is that you have to reduce it again when it rises. That can be done. It won't be done perfectly, I'm sure, so there'll be too little or too much inflation; but that doesn't mean that a fixed money supply is better.
Whether it's a fixed money supply or not is not the issue. The issue is that millions of people are better at deciding where that level should be is orders of magnitude better than letting a small group make that guess. They are far more likely to be wrong.
The policy response is a response to irrational decision making.
No it's not. It's a response to its own prior poor policy decisions
I'm sure that amongst the 25% unemployed in the depression there were butchers who wanted bread, bakers who wanted meat, farmers who wanted tractors, engineers who wanted corn, etc. There must have been many valuable trades which just didn't happen because the normal economic decision making systems were broken.
Yes, they were. Broken by poor policy decisions. For instance - food prices under FDR were considered (by farmers) too low, so the policy response was to destroy crops and pay farmers to not grow food. Yea, well... it worked to raise food prices, but how did that really help anybody else?
Why should it be driven by those things? Relative prices should (in the absence of specific market failures, etc, of course), but why the absolute price level?
Because that's how rational resource allocation occurs. If a loaf of brea
No man has a monopoly on the truth and there are many different paths to it and ways it is expressed, you dislike the way I express my factual observations so you accuse me of not understanding economics.
I didn't accuse you of that, you stated it yourself. And I pointed out that it's a good starting point, because no one person or small group can understand macro economics well enough to be able to plan and manage it. Which is the point.
If I didn't response to some of your points that you felt were relevant, it's because I didn't understand your basis or point you were trying to make. Yes, there are many "ways it may be expressed", etc., but you have to find some common ground that allows you to communicate with someone else. That's great that you have some unique "view of truth" and "way of expressing" it, but the hard part is finding a way to communicate it with someone else.
He notes, for example, that changes in M2 are preceeding changes in M0 (which by itself invalidates Austrian theory, by the way).
No, it doesn't. It just shows how the Fed manipulates the economy. Just because banks know that they can go to the Fed or the Treasury to get more debt or a bailout when they are in trouble doesn't mean that it's caused by rational decision-making, it just means that the banks understand the kind of system they are working under, which allowed private profits to be made, and that risk is mitigated by allowing huge debts to be socialized by the tax system.
But not always the debt is unsustainable - if you have real growth, then growth in debt can be sustainable. That's the basic advantage of FRB with respect to gold standard - unlike gold standard, FRB can adapt money supply to finance real growth.
And how do you determine what is "real growth"? We had lots of growth during the dot-com boom, financed by cheap debt. Yet, it couldn't be sustained. I wonder why? Keen (and Minsky) don't seem to be able to explain this. They continue to proposed the same policies that failed then, and are failing now.
With gold standard, it pays off to hold on money during real growth, because money increase value, and it means nobody wants to invest.
Actually, the opposite is true. You don't get "growth" by holding onto money, even if it's gold. Even on a gold standard some inflation occurs. The only way to increase your saving (or keep it from losing value to inflation over the long term) is to invest that money in some value-creating enterprise.
But they are both inherently unstable, because the debts can grow even if there is no corresponding real growth.
Exactly. Especially when, for instance, the Fed keeps interest rates artificially low, creates a housing bubble, and people borrow money against and artificially inflated home value. If the interest rates were allowed to go up in response to the reduced savings, the bubble would not grow so large and the adjustment would be short and easy to deal with, instead of creating a global crises like this one did.
Inflation is too much money chasing too few goods. Prices go up because there's more money in the system and production of goods is either stagnant or declining.
Prices depend on the velocity of money, too. If everyone decides to hang on to their money more tightly, so that each piece of it changes hands half as often, say, then the amount of money in the system can be increased without causing inflation. Making it impossible to adjust your money supply (which is all the gold standard really achieves) doesn't eliminate inflation and deflation, it just removes a potentially valuable policy response to changes in things like consumer confidence and the savings rate.
Here, you are just talking about some of the mechanisms of inflation. A better way to describe it is the amount of capital in the system. If, as you suggest, the response to reduced spending is for a central planner to increase the amount of fake money, then prices are propped up when they should naturally be falling. Eventually this will catch up with you when people start spending, and you'll have to raise interest rates and inflation will take off.
This "potentially valuable policy response" that you advocate is simply a way to interfere with the ability of people to make rational decisions about spending and saving, and prevent any corrections in resource allocation from occurring where they should.
That's why economies that took longer to leave the gold standard took longer to come out of the great depression - they couldn't respond to the fall in the velocity of money by creating more.
I'm afraid you've been misinformed. The US was one of the last economies to recover from the Great Depression, precisely due to the application of the policies you favor. They didn't "go off the gold standard" at all until 1971. Rather, FDR confiscated all the gold, then decided the US dollar was worth about 1/2 of the amount of gold it was worth before. Huge inflation of the money supply. None of this worked - unemployment in the US remained about 18% until WWII.
You also shouldn't just assume that inflation is always and necessarily evil. Especially not in the presence of price and wage stickiness - in some areas of some economies it's as near to impossible as makes no difference to reduce wages in nominal terms. A low level of inflation is quite possibly a good thing.
Yes, you are correct. But inflation should be driven by the resources available, demand for various goods, and the level of labor available, not by some central planning facility trying to manage everybody's decision-making. The natural level of inflation in a gold-backed monetary system is about 3%, as that's the typical amount of gold entering the economy each year. But that's mitigated since the practice of mining, refining, and distributing gold is real work, actual effort that provides value and jobs.
That's a pretty long-winded way of saying you don't understand economics. But at least it's a good starting point.
You may not like "money" (however you define it) as a way of allocating resources, but it's the only one we have right now. Maybe some day we could transition to something like the "reputation system" envisioned in Accelerando, but we have to work with what we have to work with now.
The arguments you make point to Austrian economics working better than anything out of Keynesian, as it is closer to following physical assets than the artificially controlled fiat money that Keynesians prefer. Yes, even with real assets being used as a medium of exchange, there will be bubbles and busts, but they will be very much limited to specific industries or companies, rather than across the entire economy like happens now. But that's because entrepreneurs have to make guesses about the future - it can't be predicted in any deterministic way, since it involves human behavior. But it's a better system than letting a few central planners make those guesses for everyone, because they can never be as accurate as millions of people making their own guesses based on experience and self-interest.
Um, well, the "Austrian School of Economics" has its origins with St. Thomas Aquinas in Spain, and doesn't really have anything to do with Austria and its government or politics.
"This system is just not sustainable. How could it ever do anything but ultimately fail? Who are these people who expected it to be a paragon of stability and sustainability?"
The same thing was said about the gold standard, every tom dick and harry intellectual thinks they "know" how to run an economy I call 100% BULLSHIT.
Lol! I guess you know better, and we should trust you instead? As well as all the people claiming they know how to "run" an economy but somehow keep getting proven wrong.
Especially austiran economists, some of the most dogmatic, ideologically driven people on the face of the earth.
Not sure what "ideology" you think the "austiran"[sic] economists are espousing. More like they have developed a theory of economics that has been proven to predict results over and over again, including the current state of the economy. keynesians keep claiming that Austrian school is old, outdated, discredited. And yet their own theories of how they should be able to use central planning to produce bust-free perpetual growth somehow never works.
The real issue is that because society has become so specialized and because we use money as a store of value it's one of the KEY components of why society is so unstable because in a specialized society money must constantly be circulating between people and real goods, the problem is jobs and industries are not permanent in economies, they are constantly in upheaval being moved around, created, or destroyed because and because we only pay people if they have a job or are working, the people without jobs for any length of time start to put stress on the system.
Money ideally is supposed to keep track of debt's and obligations but here's the thing: As a medium of exchange it can't deal with the real world upheavals complexities of specialized society.
Interesting theory. Should I subscribe to your newsletter?
I really can't follow what you are talking about here - it sounds like you think money itself should be eliminated. Do we go to barter? Is that supposed to "keep up" with upheaval and complexity better? Even if what you say is true, it doesn't explain why at times (like today, and the Great Depression) nearly all industries are faced with contraction at the same time, and all of them shed jobs, instead of just one or a few sectors. Austrian theory explains this very well.
Even if austrians got their way by eliminating the fed they would have all the same issues under the gold standard, because monetary policy is only one aspect of the economy, the other is to keep money constantly flowing between those who need it (for necessities) and those who produce them (the businesses), the problem is their becomes large asymmetries because of our technology and ability to do more things with less people, which leaves a huge surplus population in a precarious, temporary and unstable jobs as the march of tech moves on and people simply can't keep up with the real world technological and political changes taking place.
But it's exactly the Fed and central banking policies that interferes with that process. By making credit artificially cheap (or artificially expensive), people make wrong choices about where to invest capital. Then you have a unsustainable bubble that will inevitably collapse. Creating money doesn't create extra consumers - it just puts industries and consumers deeper into debt until they can't continue to pay it - at which point the overdue correction drags the entire house of cards down.
Inflation is nothing more then debt and risk distribution, if Group A charges more for necessities B, the group with the least money is constantly being indebted by inflation.
Certain kinds of inflation (not all kinds) of course is an aspect of using money as a medium of exchange.
I don't know where you got this idea. Inflation is
...and then saw a whole bunch of names for lower-level people I never heard of. Rather than make a random guess, as many voters do, I just left that part of the ballot blank. Sometimes a non-vote is better than just putting the previous bum back into office.
Next time, vote for the non-incumbents. Always a safe choice.
So the woman who ran-over a five-year-old while texting should be "held accountable". What's that mean? Electrocuting her on the chair? Now you have two dead people. Brilliant solution. (rolls eyes)
Wouldn't it have been better to simply ban phone usage while driving, and therefore have two still-living people?
Actually, it would be simpler to ban cars, then we would save 45,000 lives every year. I mean, what's wrong with you anyway? You think it's okay to kill 45,000 people every year just so you can get around town quicker?
Probably because listening to my radio doesn't require fiddling with buttons. Also I can tune-out the radio, whereas tuning-out my wife during a cell call might lead to divorce. Simply put - It isn't the same thing. Conversations are more distracting, and it has been shown that texting causes FAR more accidents than the radio or other distractions..... even more accidents than drunk driving.
[citation needed]
Sorry, but all I keep seeing is statistics about "distracted driving" that then make the leap that it all means "texting and driving" - but no data to support it. Maybe you've seen something that I haven't?
Also I've seen people drive directly through red lights. They saw the light, but they were talking-up a storm on their phone and it never registered in their brain. ZOOM they went through the light nearly hitting other people in the process. DON'T sit there and tell me that's not a dangerous situation requiring immediate prohibition of phones.
That's not a dangerous situation requiring immediate prohibition of phones. Rather, that's a dangerous situation requiring immediate confiscation of that person's phone and/or car.
One more thing
- I think you are an arrogant man.
I am! No, not really.
For you (or anyone else on this thread) to sit there and justify your cellphone use while driving, makes me hope you spend your last minute sizzling on an electric chair.
That's really nice. Look, I don't talk on the phone while driving. People that do annoy me (I don't call for their death, though). But I keep it with me. I'll know it's important if it keeps ringing after I ignore it the first time or two it goes to voice mail. Then I can stop and answer it - without continuing on for 2-3 hours and finding out I didn't need to go, or was needed somewhere else.
I know that's mean, but I HATE murderers who kill people with their cars..... especially when it could have been avoided by just putting the phone in the glovebox & not touching it. Whoever is calling you is not that important. They can wait until you get to your destination.
I agree with you there, but banning phones is not the answer. Holding people accountable is. You can ban and ban and ban until you think everybody is safe and people will still find a way to kill others through irresponsible action. We learned that during prohibition in the '20s.
As I am not a liberal or a progressive, but a flat out anarchist, I take no offense in your characterizations. NOT a fucking libertarian, either, an anarchist. Means 'no rulers,' not 'no government.'
Well your post called me names, made assumptions about my beliefs, and pegged me as part of a group, so I did the same to you. The right-left bickering is tiresome, and all the stuff you came up with are repeated over and over.
You must have a different definition of anarchy than I've ever seen, which always includes "absence of government" and lawlessness. I feel government is a necessary evil, but needs to be small and with clear restrictions on its power. Kind of like the Constitution is supposed to do. Under that system, there aren't supposed to be any rulers.
Urban states pay more in taxes, and get less in Federal funds. Backwoods southern Republican/conservative/rural states are parasites on the educated citizenry of America, taking far more in Feral funds than they pay in taxes.
Yea, those uneducated white trash crackers need to be dumped in the ocean. I don't know what trauma you suffered on your last trip to Virginia, or what coffee shop propaganda you've been swallowing that created all that hate in you. Don't forget that a lot of that money is farm subsidies - all those fancy restaurants on Park Avenue have to get food from somewhere, you know. A lot of it is just vote-buying, too. But, guess what? Richer states have more rich people and poorer states have more poor people. I have no need for those Washington handouts, and would just as soon they stop - it's unsustainable anyway.
While I don't think racism has been fixed in America, I think we've come a long way. Jefferson, Franklin and Henry were products of their time, and based on the standards of that time, were decidedly NOT racist. So I'd never make that claim.
I quite agree, but I see them and others of their time being trashed all the time. I'm glad not everybody buys into that.
Liberals and progressives have more in common with mainstream America than conservatives, libertarians, and other forms of right winger. That's why they control the executive and legislative branches right now. People want more socialism, not less.
That's quite a leap. I think you need to get out more. But you're probably right that there are people that don't understand socialism, and have never lived under it, that think more of it would be better. I think that Americans are for the most part fiercely independent, but there is a lot of indoctrination going on in the schools (I was exposed to it myself) that convinces people that the job of government is to look out for you and to take care of you.
More pointedly, the left-right pendulum swings back and forth fairly often in US politics. It's no surprise that it took a huge swing to the left after the disaster that was George W Bush.
And of course it's also a tool that those in power use to keep the American people fight amongst themselves, while the long-term plans just keep moving forward in the background.
I wouldn't raise taxes as high as they were in the fifties and sixties, 90% for the highest bracket. The Laffer Curve is a useful theory, providing accurate predictions. Raise taxes too high and you will decrease government revenues while depressing the economy. Studies show that 70% is a much more realistic high end for taxes, so yes, I would raise the highest income tax, say for anything over a quarter million, to 60-70%.
But that just Federal taxes alone. States and localities impose further taxes, and they keep going up. Some people in the US already pay 60-70% marginal rate. And that doesn't count all the little fees and taxes and hidden stuff that hits the small businesses worst of all. And don't forget that the US has the highest corporate tax rate in the world - and corpora
The buttlicker supporters were entirely the creation of the mainstream media and special interest groups manipulating the frightened, disenfranchised, gullible and selfish. There were no real 'community organizers' before the mainstream media, ACORN, and CCI began sponsoring, organizing, and advertising them.
The butttlickers might claim now to be upset with Obama not following up on promises, but you and I both know they all voted for him. Buttlickers are not some sort of rational progressive group. They are simple uneducated liberals from urbanized elitist states, where the remains of the old Democratic still hold some sort of sway.
But I can see none of this will get through your ideological defenses. You claim Jefferson, Franklin, and Henry as misguided racist white guys. Your opinions are demonstrably deranged, and arguing with you will get neither of us anywhere. It is quite obvious that you have already drunk the kool-aid and ordered several more crates of the stuff.
You have nothing in common with mainstream Americans. The buttlickers have nothing in common with the any moderate party. You have representation, and want to raise America's taxes to the highest (ignoring all the state and local taxes and various fees the middle class is constantly hit with) in the world, even though it will still never pay the massive debt you're racking up right now, and allow the UN and other global organizations to set rules for America. The buttlickers's political philosophy boils down to, "I want mine, so fuck off and give it to me." They are childish, petulat, and selfish, not patriotic at all.
The difference is that if a person says, "You can trust me to use my crayons responsibly," then turns-out to be a liar and scribbles on his desk... all he's done is damage the desk.
But if that same person says, "I can drive and cellphone at the same time," and it turns-out to be incapable of that task, and kills a person... well now you've killed a person.
That's only a difference of degree, not of principle. The starting point is that cars are dangerous, and people need to be responsible with them. I'm sure there are other examples of deadly accidents from other kinds of distractions (after all, the issue is distracted driving, not texting per-se), but there aren't calls for bans of radios, GPS devices, conversations with passengers, open maps, etc.
Texting is just the latest form of distraction that's being focused on, and rather than acting like luddites and banning things that most people are using responsibly, we should be holding people fully accountable for their dangerous behavior, regardless of their distraction of choice.
Okay, children, since some of you (and you know who you are) have been using your crayons to draw on your desks, we are now banning all crayons.
We can't be bothered to punish just those that act irresponsibly - much easier just to punish everyone, remove the temptation, and then we don't have to teach people to be responsible for themselves.
Slashdot Mirror
You don't look anything like this , do you?
Then again, Carter was pro legalization of pot.
Actually he was for it before he was against it.
So, you're saying he got this award for being Not Bush? That's setting the bar pretty low, isn't it?
Well... I actually think it's a stretch to say "Obama wins the Nobel Peace Prize", which implies he actually did something to earn it or had to compete with others to get it.
The committee gave it to him for whatever reason they wanted to. Probably should have been "Obama awarded Nobel Peace Prize", which is a more accurate description of what happened.
Next maybe he can toss the football around with Emanuel on the White House lawn, and they can award him the Heisman.
Bernanke, is that you?
No, people do not need buggy whips, and you're wasting resources by keeping that business going. And wheat won't last forever. If there's too much to be eaten you're just wasting resources by inflating the price artificially.
Sorry, but your pie-in-the-sky "we can fix the economy by fiddling with the money supply" is exactly the problem we are facing right now. Instead of the short-term, limited recession that you fear so much, we have an all-out crisis almost as bad as the Great Depression (which was also created and prolonged by exactly the kind of fiddling you espouse).
Please get out of the way, and stop doing this to us.
No, they don't report back to Nielson, they use their own ratings.
And if your cable box isn't reporting back your viewing habits now, it soon will.
I'm in favor of a representative lottery, myself. It would work just like jury duty - all registered voters go onto the list. When your number's up, you have to serve. To get out of it, you have to appeal to a judge with a really good reason why you can't do it.
These are interesting ideas, and I certainly go along with the idea that the greatest power should belong to the smallest groups (governing from the bottom up). I've said before that communism is theoretically the best possible system of government, but it is practically unworkable for groups of more than about 40 or 50.
Anyway, just some thoughts. There are good people in government, who really care about the public. Sociopaths may be over represented in the halls of power and the corporate boardroom, but they do not even make up the majority.
Yes, there are good ones, but way too few and far between. For the most part, politicians do not have souls. (sorry if that offends you). If they have a culture of sociopathy, it doesn't really matter if many are not built that way. Not having souls makes them easy to manipulate, it's just that we're letting the wrong people manipulate them.
No, it doesn't. It just shows how the Fed manipulates the economy. Just because banks know that they can go to the Fed or the Treasury to get more debt or a bailout when they are in trouble doesn't mean that it's caused by rational decision-making, it just means that the banks understand the kind of system they are working under, which allowed private profits to be made, and that risk is mitigated by allowing huge debts to be socialized by the tax system.
I don't think they knew, at least at the beginning of the crisis. It wasn't obvious at all.
So, you've never heard of the "Greenspan put"? The bankers and Wall Street certainly have.
Or - unless you're traveling and using hotel or hotpoint access to get to your server a lot, or your list is too long, just block SSH from all IPs except for the addresses you know you'll be using.
Firstly, why should they be falling? What does having the price of everything fall or rise achieve that an increase in the money supply with constant prices does not?
Well, your premise was that you could increase the money supply without inflation when "everyone decides to hang on to their money more tightly". The response that should be to drop prices, so people will buy more. Not sure what else you were referring to - if people are holding on to money, they are not buying goods, yes? So maybe because prices are too high?
Secondly, price falls are a very difficult process to a point where this process doesn't really work. This is really the nub of it, if prices were not sticky the gold standard would work. Workers and unions defend wages, firms may need their input prices to fall before they can fully reduce their output prices, competitors wait for someone else to move first, homeowners hold out for house prices which are months or years out of date, etc. Prices stay high for months or years and resources get underused, including labour. If everyone could agree to reduce their prices together there'd be no problem, but it's a coordination nightmare compounded by money illusion. Why bother when the state can adjust the money supply? It's like changing the clocks to do daylight saving....we /could/ have the same effect by all agreeing to adjust all of our schedules, opening times, etc. all at once on the same day whilst keeping the time the same. But it's much easier to change the defined time of day.
You're making a preconceived assumption that everything has to be centrally planned. BTW: when industries do this it's considered price-fixing and is illegal. Somehow government or the Fed should do it instead? Why not just let the prices correct themselves. If people aren't buying buggy whips, maybe the buggy whip factory should just shut down. If people aren't buying much wheat, farms should cut back on production. If a labour union won't allow a business to lower wages or layoff workers even when people are buying less of their product, the company should go out of business. Yes, that means some will go through hard times. But that's better than putting everybody through hard times to keep a business going that is doomed to failure anyway.
Which is just saying that the other side of increasing the supply when the velocity of money falls is that you have to reduce it again when it rises. That can be done. It won't be done perfectly, I'm sure, so there'll be too little or too much inflation; but that doesn't mean that a fixed money supply is better.
Whether it's a fixed money supply or not is not the issue. The issue is that millions of people are better at deciding where that level should be is orders of magnitude better than letting a small group make that guess. They are far more likely to be wrong.
The policy response is a response to irrational decision making.
No it's not. It's a response to its own prior poor policy decisions
I'm sure that amongst the 25% unemployed in the depression there were butchers who wanted bread, bakers who wanted meat, farmers who wanted tractors, engineers who wanted corn, etc. There must have been many valuable trades which just didn't happen because the normal economic decision making systems were broken.
Yes, they were. Broken by poor policy decisions. For instance - food prices under FDR were considered (by farmers) too low, so the policy response was to destroy crops and pay farmers to not grow food. Yea, well... it worked to raise food prices, but how did that really help anybody else?
Why should it be driven by those things? Relative prices should (in the absence of specific market failures, etc, of course), but why the absolute price level?
Because that's how rational resource allocation occurs. If a loaf of brea
No man has a monopoly on the truth and there are many different paths to it and ways it is expressed, you dislike the way I express my factual observations so you accuse me of not understanding economics.
I didn't accuse you of that, you stated it yourself. And I pointed out that it's a good starting point, because no one person or small group can understand macro economics well enough to be able to plan and manage it. Which is the point.
If I didn't response to some of your points that you felt were relevant, it's because I didn't understand your basis or point you were trying to make. Yes, there are many "ways it may be expressed", etc., but you have to find some common ground that allows you to communicate with someone else. That's great that you have some unique "view of truth" and "way of expressing" it, but the hard part is finding a way to communicate it with someone else.
He notes, for example, that changes in M2 are preceeding changes in M0 (which by itself invalidates Austrian theory, by the way).
No, it doesn't. It just shows how the Fed manipulates the economy. Just because banks know that they can go to the Fed or the Treasury to get more debt or a bailout when they are in trouble doesn't mean that it's caused by rational decision-making, it just means that the banks understand the kind of system they are working under, which allowed private profits to be made, and that risk is mitigated by allowing huge debts to be socialized by the tax system.
But not always the debt is unsustainable - if you have real growth, then growth in debt can be sustainable. That's the basic advantage of FRB with respect to gold standard - unlike gold standard, FRB can adapt money supply to finance real growth.
And how do you determine what is "real growth"? We had lots of growth during the dot-com boom, financed by cheap debt. Yet, it couldn't be sustained. I wonder why? Keen (and Minsky) don't seem to be able to explain this. They continue to proposed the same policies that failed then, and are failing now.
With gold standard, it pays off to hold on money during real growth, because money increase value, and it means nobody wants to invest.
Actually, the opposite is true. You don't get "growth" by holding onto money, even if it's gold. Even on a gold standard some inflation occurs. The only way to increase your saving (or keep it from losing value to inflation over the long term) is to invest that money in some value-creating enterprise.
But they are both inherently unstable, because the debts can grow even if there is no corresponding real growth.
Exactly. Especially when, for instance, the Fed keeps interest rates artificially low, creates a housing bubble, and people borrow money against and artificially inflated home value. If the interest rates were allowed to go up in response to the reduced savings, the bubble would not grow so large and the adjustment would be short and easy to deal with, instead of creating a global crises like this one did.
Inflation is too much money chasing too few goods. Prices go up because there's more money in the system and production of goods is either stagnant or declining.
Prices depend on the velocity of money, too. If everyone decides to hang on to their money more tightly, so that each piece of it changes hands half as often, say, then the amount of money in the system can be increased without causing inflation. Making it impossible to adjust your money supply (which is all the gold standard really achieves) doesn't eliminate inflation and deflation, it just removes a potentially valuable policy response to changes in things like consumer confidence and the savings rate.
Here, you are just talking about some of the mechanisms of inflation. A better way to describe it is the amount of capital in the system. If, as you suggest, the response to reduced spending is for a central planner to increase the amount of fake money, then prices are propped up when they should naturally be falling. Eventually this will catch up with you when people start spending, and you'll have to raise interest rates and inflation will take off.
This "potentially valuable policy response" that you advocate is simply a way to interfere with the ability of people to make rational decisions about spending and saving, and prevent any corrections in resource allocation from occurring where they should.
That's why economies that took longer to leave the gold standard took longer to come out of the great depression - they couldn't respond to the fall in the velocity of money by creating more.
I'm afraid you've been misinformed. The US was one of the last economies to recover from the Great Depression, precisely due to the application of the policies you favor. They didn't "go off the gold standard" at all until 1971. Rather, FDR confiscated all the gold, then decided the US dollar was worth about 1/2 of the amount of gold it was worth before. Huge inflation of the money supply. None of this worked - unemployment in the US remained about 18% until WWII.
You also shouldn't just assume that inflation is always and necessarily evil. Especially not in the presence of price and wage stickiness - in some areas of some economies it's as near to impossible as makes no difference to reduce wages in nominal terms. A low level of inflation is quite possibly a good thing.
Yes, you are correct. But inflation should be driven by the resources available, demand for various goods, and the level of labor available, not by some central planning facility trying to manage everybody's decision-making. The natural level of inflation in a gold-backed monetary system is about 3%, as that's the typical amount of gold entering the economy each year. But that's mitigated since the practice of mining, refining, and distributing gold is real work, actual effort that provides value and jobs.
That's a pretty long-winded way of saying you don't understand economics. But at least it's a good starting point.
You may not like "money" (however you define it) as a way of allocating resources, but it's the only one we have right now. Maybe some day we could transition to something like the "reputation system" envisioned in Accelerando, but we have to work with what we have to work with now.
The arguments you make point to Austrian economics working better than anything out of Keynesian, as it is closer to following physical assets than the artificially controlled fiat money that Keynesians prefer. Yes, even with real assets being used as a medium of exchange, there will be bubbles and busts, but they will be very much limited to specific industries or companies, rather than across the entire economy like happens now. But that's because entrepreneurs have to make guesses about the future - it can't be predicted in any deterministic way, since it involves human behavior. But it's a better system than letting a few central planners make those guesses for everyone, because they can never be as accurate as millions of people making their own guesses based on experience and self-interest.
Um, well, the "Austrian School of Economics" has its origins with St. Thomas Aquinas in Spain, and doesn't really have anything to do with Austria and its government or politics.
"This system is just not sustainable. How could it ever do anything but ultimately fail? Who are these people who expected it to be a paragon of stability and sustainability?"
The same thing was said about the gold standard, every tom dick and harry intellectual thinks they "know" how to run an economy I call 100% BULLSHIT.
Lol! I guess you know better, and we should trust you instead? As well as all the people claiming they know how to "run" an economy but somehow keep getting proven wrong.
Especially austiran economists, some of the most dogmatic, ideologically driven people on the face of the earth.
Not sure what "ideology" you think the "austiran"[sic] economists are espousing. More like they have developed a theory of economics that has been proven to predict results over and over again, including the current state of the economy. keynesians keep claiming that Austrian school is old, outdated, discredited. And yet their own theories of how they should be able to use central planning to produce bust-free perpetual growth somehow never works.
The real issue is that because society has become so specialized and because we use money as a store of value it's one of the KEY components of why society is so unstable because in a specialized society money must constantly be circulating between people and real goods, the problem is jobs and industries are not permanent in economies, they are constantly in upheaval being moved around, created, or destroyed because and because we only pay people if they have a job or are working, the people without jobs for any length of time start to put stress on the system.
Money ideally is supposed to keep track of debt's and obligations but here's the thing: As a medium of exchange it can't deal with the real world upheavals complexities of specialized society.
Interesting theory. Should I subscribe to your newsletter?
I really can't follow what you are talking about here - it sounds like you think money itself should be eliminated. Do we go to barter? Is that supposed to "keep up" with upheaval and complexity better? Even if what you say is true, it doesn't explain why at times (like today, and the Great Depression) nearly all industries are faced with contraction at the same time, and all of them shed jobs, instead of just one or a few sectors. Austrian theory explains this very well.
Even if austrians got their way by eliminating the fed they would have all the same issues under the gold standard, because monetary policy is only one aspect of the economy, the other is to keep money constantly flowing between those who need it (for necessities) and those who produce them (the businesses), the problem is their becomes large asymmetries because of our technology and ability to do more things with less people, which leaves a huge surplus population in a precarious, temporary and unstable jobs as the march of tech moves on and people simply can't keep up with the real world technological and political changes taking place.
But it's exactly the Fed and central banking policies that interferes with that process. By making credit artificially cheap (or artificially expensive), people make wrong choices about where to invest capital. Then you have a unsustainable bubble that will inevitably collapse. Creating money doesn't create extra consumers - it just puts industries and consumers deeper into debt until they can't continue to pay it - at which point the overdue correction drags the entire house of cards down.
Inflation is nothing more then debt and risk distribution, if Group A charges more for necessities B, the group with the least money is constantly being indebted by inflation.
Certain kinds of inflation (not all kinds) of course is an aspect of using money as a medium of exchange.
I don't know where you got this idea. Inflation is
When a loaf of bread costs $25 of fiat money, you might wish you had voted for that guy.
...and then saw a whole bunch of names for lower-level people I never heard of. Rather than make a random guess, as many voters do, I just left that part of the ballot blank. Sometimes a non-vote is better than just putting the previous bum back into office.
Next time, vote for the non-incumbents. Always a safe choice.
So the woman who ran-over a five-year-old while texting should be "held accountable". What's that mean? Electrocuting her on the chair? Now you have two dead people. Brilliant solution. (rolls eyes)
Wouldn't it have been better to simply ban phone usage while driving, and therefore have two still-living people?
Actually, it would be simpler to ban cars, then we would save 45,000 lives every year. I mean, what's wrong with you anyway? You think it's okay to kill 45,000 people every year just so you can get around town quicker?
Probably because listening to my radio doesn't require fiddling with buttons. Also I can tune-out the radio, whereas tuning-out my wife during a cell call might lead to divorce. Simply put - It isn't the same thing. Conversations are more distracting, and it has been shown that texting causes FAR more accidents than the radio or other distractions..... even more accidents than drunk driving.
[citation needed]
Sorry, but all I keep seeing is statistics about "distracted driving" that then make the leap that it all means "texting and driving" - but no data to support it. Maybe you've seen something that I haven't?
Also I've seen people drive directly through red lights. They saw the light, but they were talking-up a storm on their phone and it never registered in their brain. ZOOM they went through the light nearly hitting other people in the process. DON'T sit there and tell me that's not a dangerous situation requiring immediate prohibition of phones.
That's not a dangerous situation requiring immediate prohibition of phones. Rather, that's a dangerous situation requiring immediate confiscation of that person's phone and/or car.
One more thing
- I think you are an arrogant man.
I am! No, not really.
For you (or anyone else on this thread) to sit there and justify your cellphone use while driving, makes me hope you spend your last minute sizzling on an electric chair.
That's really nice. Look, I don't talk on the phone while driving. People that do annoy me (I don't call for their death, though). But I keep it with me. I'll know it's important if it keeps ringing after I ignore it the first time or two it goes to voice mail. Then I can stop and answer it - without continuing on for 2-3 hours and finding out I didn't need to go, or was needed somewhere else.
I know that's mean, but I HATE murderers who kill people with their cars..... especially when it could have been avoided by just putting the phone in the glovebox & not touching it. Whoever is calling you is not that important. They can wait until you get to your destination.
I agree with you there, but banning phones is not the answer. Holding people accountable is. You can ban and ban and ban until you think everybody is safe and people will still find a way to kill others through irresponsible action. We learned that during prohibition in the '20s.
As I am not a liberal or a progressive, but a flat out anarchist, I take no offense in your characterizations. NOT a fucking libertarian, either, an anarchist. Means 'no rulers,' not 'no government.'
Well your post called me names, made assumptions about my beliefs, and pegged me as part of a group, so I did the same to you. The right-left bickering is tiresome, and all the stuff you came up with are repeated over and over.
You must have a different definition of anarchy than I've ever seen, which always includes "absence of government" and lawlessness. I feel government is a necessary evil, but needs to be small and with clear restrictions on its power. Kind of like the Constitution is supposed to do. Under that system, there aren't supposed to be any rulers.
Urban states pay more in taxes, and get less in Federal funds. Backwoods southern Republican/conservative/rural states are parasites on the educated citizenry of America, taking far more in Feral funds than they pay in taxes.
Yea, those uneducated white trash crackers need to be dumped in the ocean. I don't know what trauma you suffered on your last trip to Virginia, or what coffee shop propaganda you've been swallowing that created all that hate in you. Don't forget that a lot of that money is farm subsidies - all those fancy restaurants on Park Avenue have to get food from somewhere, you know. A lot of it is just vote-buying, too. But, guess what? Richer states have more rich people and poorer states have more poor people. I have no need for those Washington handouts, and would just as soon they stop - it's unsustainable anyway.
While I don't think racism has been fixed in America, I think we've come a long way. Jefferson, Franklin and Henry were products of their time, and based on the standards of that time, were decidedly NOT racist. So I'd never make that claim.
I quite agree, but I see them and others of their time being trashed all the time. I'm glad not everybody buys into that.
Liberals and progressives have more in common with mainstream America than conservatives, libertarians, and other forms of right winger. That's why they control the executive and legislative branches right now. People want more socialism, not less.
That's quite a leap. I think you need to get out more. But you're probably right that there are people that don't understand socialism, and have never lived under it, that think more of it would be better. I think that Americans are for the most part fiercely independent, but there is a lot of indoctrination going on in the schools (I was exposed to it myself) that convinces people that the job of government is to look out for you and to take care of you.
More pointedly, the left-right pendulum swings back and forth fairly often in US politics. It's no surprise that it took a huge swing to the left after the disaster that was George W Bush.
And of course it's also a tool that those in power use to keep the American people fight amongst themselves, while the long-term plans just keep moving forward in the background.
I wouldn't raise taxes as high as they were in the fifties and sixties, 90% for the highest bracket. The Laffer Curve is a useful theory, providing accurate predictions. Raise taxes too high and you will decrease government revenues while depressing the economy. Studies show that 70% is a much more realistic high end for taxes, so yes, I would raise the highest income tax, say for anything over a quarter million, to 60-70%.
But that just Federal taxes alone. States and localities impose further taxes, and they keep going up. Some people in the US already pay 60-70% marginal rate. And that doesn't count all the little fees and taxes and hidden stuff that hits the small businesses worst of all. And don't forget that the US has the highest corporate tax rate in the world - and corpora
The buttlicker supporters were entirely the creation of the mainstream media and special interest groups manipulating the frightened, disenfranchised, gullible and selfish. There were no real 'community organizers' before the mainstream media, ACORN, and CCI began sponsoring, organizing, and advertising them.
The butttlickers might claim now to be upset with Obama not following up on promises, but you and I both know they all voted for him. Buttlickers are not some sort of rational progressive group. They are simple uneducated liberals from urbanized elitist states, where the remains of the old Democratic still hold some sort of sway.
But I can see none of this will get through your ideological defenses. You claim Jefferson, Franklin, and Henry as misguided racist white guys. Your opinions are demonstrably deranged, and arguing with you will get neither of us anywhere. It is quite obvious that you have already drunk the kool-aid and ordered several more crates of the stuff.
You have nothing in common with mainstream Americans. The buttlickers have nothing in common with the any moderate party. You have representation, and want to raise America's taxes to the highest (ignoring all the state and local taxes and various fees the middle class is constantly hit with) in the world, even though it will still never pay the massive debt you're racking up right now, and allow the UN and other global organizations to set rules for America. The buttlickers's political philosophy boils down to, "I want mine, so fuck off and give it to me." They are childish, petulat, and selfish, not patriotic at all.
The difference is that if a person says, "You can trust me to use my crayons responsibly," then turns-out to be a liar and scribbles on his desk... all he's done is damage the desk.
But if that same person says, "I can drive and cellphone at the same time," and it turns-out to be incapable of that task, and kills a person... well now you've killed a person.
That's only a difference of degree, not of principle. The starting point is that cars are dangerous, and people need to be responsible with them. I'm sure there are other examples of deadly accidents from other kinds of distractions (after all, the issue is distracted driving, not texting per-se), but there aren't calls for bans of radios, GPS devices, conversations with passengers, open maps, etc.
Texting is just the latest form of distraction that's being focused on, and rather than acting like luddites and banning things that most people are using responsibly, we should be holding people fully accountable for their dangerous behavior, regardless of their distraction of choice.
Okay, children, since some of you (and you know who you are) have been using your crayons to draw on your desks, we are now banning all crayons.
We can't be bothered to punish just those that act irresponsibly - much easier just to punish everyone, remove the temptation, and then we don't have to teach people to be responsible for themselves.